This invention relates generally to systems and methods for distributed enhanced payment processing, including multi-merchant tokenization of transaction information, augmented with processing of virtual electronic payment (VEP), and additionally augmented with arbitraged payment of both VEP and legacy credit and debit card transactions. Such systems and methods enable increased security for payments and transactions, provide for more seamless transactions across groups of related merchants, and enable groups of related merchants as well as merchants in general to provide a broader range of payment related services than those available from traditional credit and debit payment card providers alone. Additionally, such systems and methods provide merchants greater control over the processing of electronic payments via Arbitraged Enhanced Payment (AEP) services including, but not limited to, how rapidly a given payment is processed and/or what entity processes a given payment.
Many brick and mortar merchants utilize electronic point of sale (POS) terminal systems to perform purchase tallying and payment processing including electronic payments. A natural element of POS terminal system development has been the establishment of third party electronic payment management service providers who securely and reliably aggregate and direct electronic payment requests from merchants' POS terminals to payment card companys' payment systems and thus act as payment intermediaries. From time to time a given merchant may select a new electronic payment management service. The process of integrating a new merchant account's POS terminal system(s) and corresponding payments stream into an arbitraged enhanced payments processing system (AEPPS) is commonly termed “merchant boarding”.
New merchants may be recruited via a large variety of intermediaries including but not limited to independent sales organizations (ISOs) and POS system vendors. A merchant's POS terminal system components may be sourced from several manufacturers and integrated and maintained by third party POS system developers. An aggregating intermediary, such as an ISO, may modify or augment transactional content exchanged with a given POS terminal system.
The merchant boarding process may be detail laden, potentially time consuming, and requiring systematic consideration and complex analysis to complete. Therefore, the merchant boarding process is an excellent, but challenging, candidate for computerized system automation.
“Tokenization” provides a means for replacing sensitive transaction information with a “token” containing encrypted transaction information that is secured against deciphering by a hacker (or a merchant) because decryption key storage and decryption service is provided remotely from the storage location of the encrypted transaction information. Multi-merchant tokenization allows utilization of such a single token, which may include account information, by multiple associated merchant's POS terminal systems.
Virtual electronic payment service providers (VEP entities), such as PayPal, Dwolla, Google Wallet, etc., may act as intermediary payment agents for purchasers and/or merchants. VEP entities provide services that augment and/or substitute for traditional payment services such as payment cards and checking accounts.
Access to the arbitraged services of an AEPPS provides merchants greater control over the processing of electronic payments including, but not limited to, how rapidly a given payment is processed and/or what entity processes a given payment, which in turn affords merchants greater flexibility in controlling costs and cash flow.
The electronic payment processing services accessed via POS terminal systems by brick and mortar merchants are absolutely fundamental to their businesses. Therefore, it is critically important that the addition of VEP entity services as well as AEP services causes little or no change or disruption to the use of “traditional card brand” (TCB) payer services such as credit cards and debit cards. Furthermore, to avoid aggravating purchasers, the interface for the new VEP entity services should integrate intuitively and relatively seamlessly with a given POS terminal system's existing purchaser user interfaces. The same requirements apply to the merchant boarding process required to switch to a new payment management service provider. The process must not disrupt the processing of payments or significantly inconvenience purchasers.
Payment management service providers as established electronic payment aggregators for brick and mortar merchants' POS terminal systems are a natural and logical choice for centralizing and localizing changes (and therefore minimizing costs) arising from the addition of VEP and AEP services.
It is therefore apparent that an urgent need exists for systems and methods for improved security and streamlined cost-effective transaction payment processing including support for VEP and AEP services supported by fast, accurate and cost-effective purchaser-transparent systems and methods for merchant boarding. Once merchant boarding is completed, such tokenizing VEP and AEP processing systems have the added benefit of decentralizing sensitive account data in a manner which increases security of user data, while shifting risks away from the payment management service and expanding said payment management service to process virtual electronic payments. Expedited automated merchant boarding serves a need that is fundamental and undeniable by allowing merchants to more readily, rapidly and transparently switch to a payment management service provider offering greater security, broader payments type choice, and better control of costs and cash flow.